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Yahoo
2 days ago
- Business
- Yahoo
Undervalued and Profitable: 2 Artificial Intelligence (AI) Stocks for Buffett-Minded Investors
Nvidia is a surprisingly great value stock. Berkshire Hathaway owns a more than $2 billion stake in another AI leader that you might not immediately think of as an AI business. 10 stocks we like better than Nvidia › Artificial intelligence (AI) could be the biggest growth opportunity for investors this century. According to a projection by United Nations Trade and Development, the AI market could grow from $189 billion in 2023 to $4.8 trillion by 2033. Fortunes will be made during this growth sprint, and finding the best AI stocks to invest in now could give your portfolio a huge leg up. But what about those who follow the philosophy of legendary value investors like Warren Buffett? Right now, there are two AI stocks that even Buffett-minded investors will love. In fact, Berkshire Hathaway already has a position worth more than $2 billion in one of the well-known businesses discussed below. Nearly every investor who follows the AI space will be well aware of Nvidia (NASDAQ: NVDA). Right now, with a market cap of more than $3 trillion, it's one of the three largest companies in the world. It designs and sells a variety of types of computer chips and software, but it's best known for its high-end graphics processing units, or GPUs. These specialized parallel processors can provide precisely the sort of computing power necessary to train and power machine learning and artificial intelligence models. Because it was already dominating the GPU space when the AI trend took off, Nvidia now has a roughly 90% market share in GPUs destined for AI applications -- a lead that has put it at the center of the AI revolution. As you might expect, Nvidia's sales have grown tremendously in recent years thanks to escalating demand for AI software, which has thus escalated demand for the GPUs that allow the technology to function at scale. Over the past three years alone, Nvidia's revenue has jumped by a total of 450%. And if analysts' forecasts are any indication, its sales could continue to grow at double-digit percentage rates annually for the next decade and beyond. Accordingly, Nvidia's price-to-sales multiple is a lofty 22.9. But because the company boasts one of the highest gross margins in the industry, the shares also trade at just 44 times earnings. That is a premium valuation, but given the rapid growth expected, shares trade at just 32 times forward earnings. Again, that's still fairly expensive -- but it's not as expensive as you might think a dominant AI leader with a bright future would be. An oft-repeated Buffett quote is that "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price," and he frequently advises that people should invest in quality businesses for the long term. Based on Nvidia's competitive advantages and high profitability, it's still trading at a fair price. The upfront premium should quickly come to look like a steal for investors who are willing to hang on to the stock for many years. Want to invest in an AI stock that's already in the portfolio of Buffett-run Berkshire Hathaway? There is one, but many investors may not recognize it as an artificial intelligence giant: Amazon (NASDAQ: AMZN). Most people think of Amazon as an e-commerce business. That segment still produces most of its revenue. But in terms of operating profit, the biggest contributor is actually Amazon Web Services, more commonly referred to simply as AWS. It's the largest cloud infrastructure provider in the world. With a market share of about 30%, it controls nearly as much as the next two competitors combined. AWS and its cloud computing peers are some of the biggest buyers of GPUs. Rather than building out expense infrastructure themselves, most AI companies rely on cloud computing services to help them scale up their infrastructure on demand. So if Nvidia is at the center of the AI revolution, so is AWS, and thus Amazon. Berkshire Hathaway opened its stake in Amazon back in 2019. Today, its position is worth just over $2 billion, and it made no changes in the position last quarter, even with shares at record prices. While its e-commerce business is typically in the spotlight, the company's AWS segment makes it a strong, though slightly diluted, AI pick for investors. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, and Nvidia. The Motley Fool has a disclosure policy. Undervalued and Profitable: 2 Artificial Intelligence (AI) Stocks for Buffett-Minded Investors was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
20-05-2025
- Business
- CNBC
Chinese businesses stick to diversifying away from the U.S. despite trade truce, survey shows
The intense trade war with the U.S. has left lasting scars on Chinese exporters with many looking to diversify away from the U.S., despite the temporary tariff reprieves, a private survey found. Based on a poll of 4,500 exporters across several major economies, trade insurer Allianz Trade found that 95% of Chinese exporters surveyed are planning on, if not already, doubling down on exporting to markets outside the U.S. for their goods. The U.S.-China "decoupling" remains a likely scenario over the medium term, the survey said, as Chinese exporters look to pivot away from the U.S. and American firms accelerate efforts to shift production out of China. An increasing number of firms surveyed are expecting a dent on export turnover this year due to the double-digit U.S. tariffs, the report said. Even after the temporary tariff reduction following Beijing-Washington's deal in Switzerland earlier this month, the U.S. trade-weighted tariff rate on Chinese goods remained at 39%, well above the 13% rate applied before the second Trump administration, according to Allianz Trade estimates. The rapid de-escalation of the tariff spat has led to a large spike in U.S.-bound shipments as exporters front-load orders during the 90-day grace period, pushing up freight rates. Chinese exporters in the coastal city of Ningbo are undeterred by the truce, and sticking with their plans to "go global", said Tianchen Xu, senior economist at Economist Intelligence Unit. In a recent report on a field visit to the city, which hosts China's second largest port by cargo handled after Shanghai, Xu said Southeast Asia remained the top choice among local businesses seeking to move production overseas. In Southeast Asia, companies show growing interests in setting up production in Indonesia, Xu said. On the other hand, perception was mixed about Vietnam, with concerns over rising costs weighing against an attractive labor force. While the U.S. has hammered out trade deals with China and the U.K, talks with other long trading partners seem to have stalled. Allianz Trade points out a sobering reality that global exports could see a loss of $305 billion this year on the back of the widespread trade conflicts. In comparison, global trade hit a record $33 trillion last year, according to the United Nations Trade and Development.
The Hindu
21-04-2025
- Business
- The Hindu
New pathways for India's creative economy
Few countries have a unique history of innovations and creativity that changed the world. Yet, India's tryst with creativity and innovation ranges from the arts to science, from metallurgy to medicine, from astronomy and much more. As India works towards becoming a $5 trillion economy, it needs to rejig its approach to innovations, supported by creativity at all levels. Globally, in 2022, exports of creative services surged to $1.4 trillion, marking a 29% increase since 2017. Creative goods exports also experienced a 19% rise, reaching $713 billion. Collectively, the creative economy generates annual revenues exceeding $2 trillion and supports nearly 50 million jobs worldwide. According to the United Nations Trade and Development (UNCTAD) report on the creative economy, Creative Economy Outlook 2024, three sectors are the main contributors of the creative economy (2022): software services (41.3%), research and development (30.7%), advertising, market research and architecture (15.5%). India's creative economy has also demonstrated significant contributions. In 2019, creative goods and services exports totalled about $121 billion, with creative services accounting for nearly $100 billion. The design segment alone represented 87.5% of creative goods exports, while arts and crafts contributed around 9%. As of 2024, India's creative industry is valued at $30 billion and employs about 8% of the country's working population. Creative exports grew by 20% in the previous year, generating more than $11 billion. Creativity in creative economy While investments into traditional creative economic sectors are booming in a country such as India, we still need to explore ways of being more creative and innovative to take the economic gains to new horizons, especially at the grass-root levels. This will ensure that such creations and innovations help local people. This will be a disruptive approach to promoting local economies. Research has shown that creativity can be segmented into four types: deliberate and emotional; deliberate and cognitive; spontaneous and emotional, and spontaneous and cognitive. Creativity can be endogenous — triggered by one's own thoughts or imagination or exogenous — that is externally induced. It can be manifested concurrently or only episodically such as in crises or extreme climate events. A significant part of local innovations falls into deliberate and cognitive as well as the spontaneous and cognitive segments. Creativity precedes innovation. While creativity can be individual-based, innovation can be bootstrapped but needs an institution to support its scale or formalisation. In a country such as India, enormous creativity exists but such creativity is not translated into innovation many a time. Creators come up with ideas while innovators translate the ideas into products and services. We need investments to bridge the gap between creativity and innovation. Pioneering work on identifying and recognising grassroot innovations by organisations such as the Grassroot Innovations Augmentation Network (GIAN) have resulted in popularising hundreds of grassroot creative ideas. An example from Indonesia Where does one start? Consider a pioneering creative solution, the Antrodam Project, that has been conceived by the students of Binus School in Bekasi, Indonesia. The Antrodam Project began with one mission: to create a solution to flooding, a challenge that affects communities worldwide. Looking for ideas from the best source of inspiration, nature itself, the Binus team explored structures from the animal and plant kingdoms to find the perfect design. Inspired by the nests of Indian Harvester ants, the students engineered a flood protection system that works with nature rather than against it. The ants have intricate tunnel systems that direct water away from their nests, keeping them safe and dry. The students were also inspired by natural structures such as 'rose petals and their layered design to direct water; the lettuce leaf coral, with its intricate branching; the giant pill millipede which can roll into a compact shape; and the male frigate bird, known for its large, water-resistant throat pouch'. This is sheer creative brilliance but what we now need are investments to scale up these creative ideas into an innovation at scale that can be applied elsewhere. Take some examples of creativity from India such as the 'mitti cool clay refrigerator', pedal-operated washing machines or the amphibious bicycle. Each needs scale-up to be commercially attractive with appropriate protection for the creative idea, design and application. Investing in creativity and innovation It is time that India invests more in creative pursuits at all levels — grassroots to technology-intensive ideas. Grassroot innovations need more investments to ensure the proof of concept demonstrated is supported by capital investments. The innovation and associated intellectual property protection for such innovations, including informal ones, need better protection through adjustments to Indian intellectual property protection policies and regulations. It is also time that the government invests in 'one district one innovation' modelled after the successful initiative of 'one district one product' initiative. While the climate tech sector in India received $2,853 million in 2023, the investments that grassroots creativity received seems to be very poor. Even if a small percentage of investments go to climate adaptation and mitigation actions that are creative and not working at the local level, India's ability to deal with climate change will be many times more. What we need today is an ecosystem that balances creativity and innovations at all levels, backed by investments to ensure that India's ambitions to improve creative economic conditions are met. Balakrishna Pisupati is the Country Head of the United Nations Environment Programme, India, and a member of Team UN India
